War against cash

If you were around during the Nigerian civil war that consumed many lives, and left some families devastated over 40 years after, you would readily say war connotes bad omen. On the other hand, if you were on the other side, you would look in the mirror and smile because the war in question has united different tribes and tongues.

However, aside the civil war, which left a sour taste in the mouth, the regimes of some long gone military rulers fought a different kind of war in their effort to sanitise the country and keep things in their proper places. What did the strong rulers do? They thought (in their wisdom) that the problem with Nigerians and Nigeria was indiscipline, as such; Nigerians should be “disciplined”.

Therefore, they reasoned, the best way to go about it was to “force” Nigerians to behave in an orderly manner by “intimidating” them to form a long queue at the various bus stops, grocery stores, banking halls, on university campuses, everywhere, while soldiers lurked around to “discipline” any bloody civilian who contravenes the law.

Suddenly, the queue culture caught on. The news at nine on the Nigeria Television Authority (NTA), the nation’s TV station, was incomplete without the queue culture commercial being aired. The social scene also caught the queue bug as Fuji and Juju musicians sang about it. Popular sitcom, New Masquerade, dramatised it. “Andrew” voiced it. Students cracked jokes about it.

“The queue culture is working”, the military rulers thought, without paying particular attention to the endemic corruption in the guise of kickback, contract inflation, abandoned projects, vandalisation and arson, and other corrupt practices that characterised the democratically elected civilian regime, which that military junta toppled.

Then, that military regime thought “force” was the name of the game, thinking that it could cudgel Nigerians into participating in its war against indiscipline (WAI).

It thought with WAI, Nigeria would become a better and disciplined nation. That military regime was wrong. Why? What happened next would explain. While that military ruler was basking in its triumph and settling down to act out its next script, a coup, cooked by an insider, put an end to WAI, WAI brigades and the proponents of WAI.

What is the lesson? That is not the story for today. The focus is on another war being fought by another governor. The war today is against cash. Several scholars and monetary “experts” have pontificated on the cashless policy of the Central Bank of Nigeria (CBN). Some said it is a policy whose time has come. Other said its time has not come. Yet, another set said for Nigeria to compete favourably with the other economies of the world in either Europe, the United States or Africa, Nigeria needs to transit from cash-based to cashless transactions.

The cashless initiative is aimed at encouraging more electronic-based transactions and reducing the amount of physical cash in circulation. To make its argument logical, the CBN said that the direct cost of cash management to the banking industry in 2009 was N114.5 billion with an estimated cost of N192 billion by 2012.

According to the CBN, the spiralling cash management cost, most of which is passed to customers in the form of bank charges and lending rates, is as a result of the country’s cash dominant economy. Therefore, the apex bank articulated its case; “the cashless policy would boost our economy as more money would be channelled through electronic process”.

Like the WAI experiment that failed to work from the inside out, the cashless policy is toeing the same route. The CBN has expended huge budget on the campaign in order to propagate the cashless policy, but it has not done it the way it would yield the desired result. There are still several grounds to cover. There are still several miles to go. There are still several stones left unturned. In addition, it seems the CBN is in a hurry to achieve its objectives of making Nigeria a cashless country.

To show that the CBN has not put its acts together, it has come out to change the theme from cashless to cashlite, saying that it does not intend to foster a cashless environment but it would promote an environment where the use of cash is light. To ensure this cashlite push, it has imposed sanction and limitations on banking public and corporate organisations, which is akin to “forcing” Nigerians to form a “queue at every bus stop” without first working assiduously at changing the attitude, the culture, the belief of Nigerians about carrying cash.

Until Nigerians change their attitude and belief about carrying cash, the cashless policy is doomed. However, once the CBN can put machinery in place and begin to engage the different stakeholders that would assist it to achieve behavioural change at the grassroots level, then it can begin to expect a semblance of success.

War against cash cannot be won in the boardroom with long oak table and sartorial suits and bow ties, no. War against cash would be won on the streets. Nigeria would remain a mixed economy of cash and card, not solely card. Cash is stubborn. Cash is attractive. In Europe, cash is still in vogue, maybe not as obscenely common as in Nigeria. However, in 2011 cash made up 56 per cent of all UK payments, which comes to about £262 billion.

Everybody likes cash. You do too. We all like cash. Why? It makes things easy. It is fast. Its value is clear. Everybody accepts it. Banks, however, do not like cash because it is expensive to handle and move around. Nevertheless, get this: war against cash cannot be won by formulating monetary policy. Anyway, there are technologies that can reduce the cost of dispensing cash. The CBN and banks should invest in such technologies and stop fighting against cash because the CBN’s war against cash is not positive.